Freezone Business Setup in UAE

A Freezone Business Setup refers to starting your company in a special business area called a “Freezone” in the UAE. These zones are made to attract foreign investors by offering benefits like full ownership (100% foreign ownership), no import/export taxes, and simplified setup rules.

You can choose a Freezone based on your business type, like trading, services, media, or tech. Each Freezone has its own regulations, costs, and license types. It’s a popular option for people who want to start a business in the UAE without needing a local partner.

However, Freezone companies generally cannot trade directly in the UAE mainland without appointing a local distributor or opening a mainland branch. Not sure whether to choose a Freezone or Mainland setup? Learn the key differences here

Many people who want to start a company in the UAE choose Free Zones. Here's why setting up a business in a UAE Free Zone is a smart move:

• 100% Ownership: Freezones allow you to fully own your business without needing a local partner, giving you complete control and flexibility.
• No Company Tax (mostly): Freezone companies may still enjoy 0% tax, but only if they meet the conditions to be a Qualifying Free Zone Person (QFZP) under UAE tax laws. This means following specific rules like having adequate substance and dealing only with permitted activities; otherwise, they are taxed at 9%.
• No Customs Fees (for re-exports): Freezone businesses usually don’t pay customs duties when importing goods into the zone and re-exporting them outside the GCC. However, this exemption doesn’t apply if the goods enter the UAE mainland; customs fees would apply in that case.
• Quick & Easy Setup: Freezones are known for making it simple and fast to register a company with some issuing licenses in 1–3 days. They try to keep paperwork low and waiting times short. This helps you start your Freezone company much faster.
• Cool Offices & Spaces: Freezones have modern offices, large storage areas (warehouses), and other places for businesses. Many even offer "flexi-desks" (a shared desk) or "co-working" spaces (a shared office), which are cheaper than having your own big office.
• Easy Visas for Staff: Freezones make it easier to get visas for you and your employees, including international hires. However, the number of visas you can get depends on the size of your office or facility and the specific Freezone’s policies.
• Focus on Specific Businesses: Many Freezones are built for certain types of companies (like tech, media, or health). This means you'll be among similar businesses, which can lead to good connections and ideas.
• Your Privacy is Safe: Freezone authorities often keep details about your company and its owners private.
• 100% Repatriation of Capital and Profits: UAE Freezones allow you to send back all your profits and invested capital to your home country with no restrictions. This is a major advantage for foreign investors seeking flexibility and financial freedom.

These good points make starting a business in the UAE Free Zones very appealing to many.

Choose the right UAE Freezone to match your business goals, budget, and activity type:

• For Tech & Online Shops:

  • Dubai Internet City (DIC): A top spot for technology companies.
  • Dubai CommerCity: Specializes in online selling, offering full e-commerce support.
  • Dubai Silicon Oasis (DSO): Good for tech, new ideas, and smart city projects.
  • IFZA (International Free Zone Authority): Very popular for online shops, advice-giving (consulting), and trading. It's known for good prices and an easy process.
  • Dubai Multi Commodities Centre (DMCC) – Voted "Global Free Zone of the Year" multiple times, ideal for commodities, crypto, and fintech businesses.

• For Media & Creative:

  • Dubai Media City (DMC): For media, advertising, and making content.
  • Dubai Production City (DPC): For printing, publishing, and media creation.
  • Fujairah Creative City (FCC): Known for cheaper licenses for media and service businesses. You can often set up from far away.
  • Twofour54 (Abu Dhabi) –A creative hub offering world-class media production facilities, attractive for global content creators.

• For Buying, Selling & Moving Goods:

  • Jebel Ali Free Zone (JAFZA): One of the biggest and oldest free zones. Excellent for heavy trading, moving goods, and making things, especially because it's right by a big port.
  • Dubai Airport Free Zone (DAFZA): Great for air cargo and valuable goods. It's close to Dubai International Airport.
  • Sharjah Airport International Free Zone (SAIF Zone): Very good for trading, making things, and logistics, with airport access and warehouses.
  • Hamriyah Free Zone (HFZA) – Popular for heavy industries, manufacturing, and oil & gas trading.

• For General Trading & Services (Budget-Friendly):

  • Ras Al Khaimah Economic Zone (RAKEZ): Offers different packages for many business types and is known for being good value for money.
  • Ajman Free Zone (AFZ): One of the older, cheaper Freezones, good for many activities.
  • Umm Al Quwain Free Zone (UAQ Free Zone): Offers many different business types and low setup costs, especially for importing and exporting.

Example: For businesses focused on trading and warehousing, Sharjah Freezone license offers affordable packages with excellent logistics access.

• For Money & Banking Businesses:

  • Dubai International Financial Centre (DIFC): A leading place for finance, with its legal system. Perfect for banks, investment firms, and money services.
  • Abu Dhabi Global Market (ADGM): Another big financial Freezone with its own special legal rules.

• Newer & Special Freezones (From 2025):

  • RAK Digital Assets Oasis (RAK DAO): The world's first Freezone just for digital money and virtual asset companies (like Web3, blockchain, crypto).
  • Expo City Dubai Free Zone: Uses the old Expo 2020 site, focusing on green ideas, new inventions, and future industries.

As is clear from the options above, most best Free Zones options are available in Dubai, which is why most entrepreneurs go for a company formation in Dubai. If you are looking for the most affordable Freezone options in UAE, check our detailed guide on the cheapest Freezones in UAE

At Safe Ledger, we help you set up your business in the UAE’s most popular Freezones, tailored to your business needs. Explore our detailed guides for each Freezone:

• Dubai Free Zone Business Setup – Ideal for tech, trading, and general services in Dubai.

• IFZA Business Setup – Budget-friendly option for trading, e-commerce, and consulting.

• Abu Dhabi Freezone Business Setup – Best for finance, tech, and professional services.

• Ras Al Khaimah Freezone Business Setup – Affordable and flexible for trading, industrial, and service companies.

• Sharjah Free Zone Business Setup – Great for manufacturing, trading, and warehousing.

• Ajman Free Zone Business Setup  – Budget-friendly option for small businesses and trading companies.

• Dubai Media City Freezone Business Setup – Perfect for media, advertising, and creative industries.

• Sharjah Airport International Freezone Business Setup – Ideal for logistics, trading, and industrial businesses.

No matter your business type or budget, Safe Ledger guides you through the complete setup process and ensures compliance every step of the way.

Choosing the right Freezone in the UAE is a key step for your business success. Each Freezone has its own rules, costs, and focus industries. Here's how to decide:

1. Know Your Business Activity: Some Freezones specialize in technology, media, trading, or manufacturing. Choose a Freezone aligned with your business activity. Some activities (like financial services, health, or education) require extra approvals from regulators outside the Freezone authority.
2. Location Matters: Choose a Freezone close to your target market, suppliers, or transport hubs like airports or seaports.
3. Check the Costs: Look at setup fees, license renewal charges, office rent, and visa limits. Some Freezones are more budget-friendly than others.
4. Office Requirements: Some Freezones allow virtual offices, while others require you to rent physical space. Choose based on your needs.
5. Visa Options: Consider how many visas you’ll need for your staff. Each Freezone offers different visa quotas.
6. Banking and Reputation: Some Freezones have better relationships with local banks, which makes opening a corporate account easier.
7. Ownership Rules & Legal Structure: Make sure the Freezone supports 100% foreign ownership and matches the company structure you want.
8. Tax Residency Benefits: If you plan to apply for UAE tax residency, choose a Freezone that issues proper office leases and meets the FTA’s tax residency criteria. This is especially important for expats seeking residency certificates.
9. Dual Licensing: Some Freezones (like Dubai Airport Freezone, DMCC, or certain Sharjah zones) allow you to apply for a dual license with the mainland to trade directly.
10. Networking & Ecosystem: Choosing a Freezone with a strong industry ecosystem (like DIFC for finance, Dubai Media City for media, Dubai Internet City for tech, etc.) helps with collaborations.

Example: Some business activities, such as retail or local contracting, require a Dubai Mainland license instead of a Freezone license.

By comparing these factors, you can pick the Freezone that helps your business grow faster and operate smoothly. Looking for the best Freezone in UAE for your industry? Explore our top picks here

Setting up a company in a UAE Freezone means registering your business in one of the designated economic zones. These zones offer faster setup processes and simpler regulations compared to starting a business on the UAE mainland.

Company Types & Licenses

Setting up a company in a UAE Freezone means registering your business in one of the designated economic zones. These zones offer faster setup processes and simpler regulations compared to starting a business on the UAE mainland.

• Free Zone Establishment (FZE) – One Owner: This is for a company owned by just one person or one existing company. This structure is common for solo entrepreneurs or companies expanding with a branch.
• Free Zone Company (FZ-LLC or FZCo) – Many Owners: This is for a company with two or more owners (people or companies). It's like a "Limited Liability Company," which means the owners' personal money is safe from the business's debts.
• Branch of a Foreign or UAE Company: If you already have a company in another country or on the UAE mainland, you can open a "branch" in a Freezone. This branch is simply an extension of your main company.

You'll also need to get a specific license based on what your business will do:

• Commercial License: For buying, selling, importing, and exporting goods. Often called a "trading license." E-commerce trade licenses are gaining popularity for online sellers, while freelancer permits are limited to approved professional categories like media, education, design, and tech.
• Service License: For offering services (like giving advice, marketing, IT help, accounting, teaching, etc.).
• Industrial License: For making, putting together, packing, or preparing goods, industrial trade licenses are favored.
• Freelance Permit: Many Freezones now offer special permits for single freelancers in certain areas like media, tech, or design. This is perfect for people working by themselves.

Certain Freezones also issue niche licenses such as e-commerce, media, education, and holding company licenses.

Things to Keep in Mind While Choosing a Free Zone in UAE

• Some Freezones don’t offer all structures (for example, some smaller Freezones only allow FZ LLCs).

• Minimum share capital requirements can differ — many Freezones have abolished them, but some still have AED 50,000–150,000 requirements.

• Freezones usually issue shares in AED only (not foreign currencies).

Before deciding on a Freezone, consider setup fees, license renewal charges, office rent, visa limits, and other UAE business setup cost details

Having the right papers ready helps your UAE Freezone business setup go smoothly:

• For People (Owners/Managers):

  • Copy of your passport (valid for at least 6 months)
  • Copy of your UAE visa (if you live in the UAE)
  • Copy of your Emirates ID (if you live in the UAE)
  • Passport-sized photos with a white background
  • Proof of where you live (e.g., a recent electricity bill from the last 3 months)
  • Your CV (resume), sometimes asked for by the manager or owners.

• For Companies (If another company owns shares in your new Freezone company):

  • Certificate showing the parent company is registered.
  • The parent company's main rulebook (Memorandum and Articles of Association).
  • A formal decision paper from the parent company agreeing to set up in the Freezone and naming a manager.
  • A document giving power to the person signing for the parent company (if needed).
  • A paper from the parent company saying it's in good standing (sometimes).

• For Your New Freezone Company:

  • Filled out application forms from the Freezone.
  • Certificate showing your chosen company name is reserved.
  • The first approval paper from the Freezone.
  • A simple business plan (for some businesses or Freezones).
  • Your company's rulebook (MOA / AOA),  the Freezone will help you prepare this.
  • Your office lease agreement (given by the Freezone).
  • Specimen signature form.
  • Ultimate Beneficial Owner (UBO) declaration form.
  • No Objection Certificate (NOC) from third parties, if applicable.

Note: Any papers not in Arabic or English might need to be officially translated and stamped.

Note:

• freezone company setup cost vary significantly by Freezone and can be lower for packages with no visa or desk requirements.
• Many Freezones offer bundled packages starting from AED 12,000 for solo entrepreneurs.
• Annual renewal fees are similar to initial licensing and office rent costs.

Here is a step-by-step guide that explains everything you need to know to register your Freezone business smoothly.

Step 1: Select the Right Freezone

There are over 40 Freezones [Jebel Ali Free Zone (JAFZA), RAKEZ, and more] in the UAE, and each one is tailored to different types of businesses. Some Freezones are located near ports or airports and are ideal for trading and logistics, while others support sectors like fintech, healthcare, or e-commerce.

When choosing a Freezone, consider the following factors:

• Type of business activity allowed
• freezone company setup cost and renewing
• Availability of office space or flexi-desk options
• Visa quota based on office size
• Proximity to clients or suppliers
• Bank account setup support

Want to know how many Freezones are in the UAE and what each offers? Just Click here

Step 2: Choose the Business Activity

Your business activity determines what type of license you will need. Each Free Zone has an official list of permitted business activities such as consulting, trading, manufacturing, e-commerce, and more.

If you’re considering setting up in Jebel Ali Free Zone (JAFZA), check our detailed JAFZA Activity List to see all the approved activities available for Freezone and Offshore companies. This guide helps you choose the right activity and avoid license rejections during registration.

Make sure your selected activity matches what your company will do, as the Freezone license will only allow you to operate within the defined scope.

Step 3: Choose a Legal Structure

Depending on how many shareholders you have, you will need to choose the right legal structure. Common options include:

• Freezone Establishment, for a single shareholder
• Freezone Company, for multiple shareholders
• Branch Office, for existing UAE or foreign companies

Some Free Zones also allow partnerships or holding company setups.

Step 4: Pick and Reserve a Company Name

You must choose a company name that complies with the naming rules set by the Freezone authority. Avoid using any offensive or religious terms, and make sure the name matches the business activity.

Once approved, the name is reserved for your business.

Step 5: Prepare and Submit the Required Documents

The basic documents required for most Free zone registrations include:

• Passport copies of all shareholders and directors
• Passport-sized photographs
• Entry visa or UAE residence visa (if applicable)
• Emirates ID copy (if available)
• Business plan or company profile (some Freezones may request it)
• No objection certificate from the current sponsor, if you are already in the UAE

Some Freezones may also ask for proof of address, bank reference letters, or experience, depending on your activity.

Step 6: Apply for Initial Approval

Once your documents are reviewed and approved by the Free Zone authority, you will receive initial approval. This confirms that you can proceed with the registration.

Step 7: Sign Legal Documents and Lease Office Space

Next, you will be required to sign key legal documents such as the Memorandum of Association and Articles of Association, which outline the rules of your company.

You also need to choose your office space. Options vary by Freezone and include shared desk, flexi desk, private offices, or warehouses.

A lease agreement must be signed between you and the Freezone authority.

Step 8: Pay the Fees and Receive Your License

Once all documents are submitted and the lease is signed, you will pay the applicable registration and license fees. After payment, the Free Zone authority will issue your:

• Business license
• Certificate of Incorporation
• Share Certificate
• Lease agreement
• Memorandum of Association and other legal documents

This completes the official registration process.

Step 9: E-Channel Registration

Before applying for any visas, your company must be registered on the UAE immigration E-channel system. This allows you to sponsor visas for investors, employees, or dependents. It’s a one-time setup, with annual renewal and government fees.

Step 10: Open a Corporate Bank Account

Once you receive your company documents, you can apply for a corporate bank account in the UAE. Each bank has different criteria; some may ask for a business plan, office lease, or projected revenues, especially for startups.

Freezones usually assist by introducing you to banks they partner with, but final approval depends on the bank’s internal compliance checks (including KYC and risk assessment).
Documents commonly required include:

• Trade license and incorporation documents
• Shareholder passport copies
• UAE entry/residence visa or Emirates ID (if available)
• Office lease agreement
• Business plan or company profile (for certain activities)

It may take 1 to 3 weeks for the account to be approved, depending on the bank and your business activity.

Step 11: Apply for UAE Residence Visas (Optional)

If your Freezone license allows visas, you can now apply for:

• Investor or partner visa
• Employee visas
• Dependent visas for family members

Note: Not all licenses offer visa quotas, especially for some e-commerce or freelance permits. Always check the visa allowance linked to your license and office type.

The visa process involves medical tests, an Emirates ID application, and visa stamping.

While Free Zones offer convenience, they come with some operational restrictions you should know.

1. Restricted Mainland Access: Free Zone companies cannot directly do business in the UAE mainland without a local distributor or branch office.
2. Limited Location Choices: You must operate within the Free Zone premises or use approved business centers within the zone.
3. Activity Restrictions: Certain regulated sectors (like finance, healthcare, or media) may require additional approvals or licenses.
4. Different Rules Per Zone: Each Free Zone has its own laws and fee structure, so the setup process and requirements can vary.
5. Visa Limit Based on Office Size: The number of visas allowed is often tied to the size of your office space.
6. Simplified Bank Account Opening: Many Freezones have strong relationships with UAE banks, which can make opening a corporate bank account faster and easier.

Even though Freezones offer more freedom, there are still important legal rules for UAE Freezone business setup that you must follow:

• Real Address: Even with "flexi-desks," you must have a registered physical address inside the Freezone.
• License Rules: What your business does must exactly match what's written on your business license. You can't do other things.
• Company Name Rules: Your company name must follow the Freezone's rules (e.g., no bad words, it must be unique, and it should show what your business does).
• Company Money: Some Freezones ask you to put a minimum amount of money into a bank for your company, but often it's just a small amount on paper.
• Company Tax Registration: Even if you pay 0% tax, all Free Zone companies must register with the government tax office (FTA) and send in a yearly tax report. This has been a must-do since 2023.
• VAT Registration: If your yearly business income from certain goods and services is more than AED 375,000, you must register for 5% sales tax (VAT) and send in reports regularly. To understand VAT requirements for Freezone companies in UAE, check our dedicated guide
• Real Business Rules (ESR): If your Free Zone company does certain activities (like being a holding company or doing shipping), you must prove that you have real business operations, assets, and staff in the UAE Freezone.
• Declare the Real Owners (UBO Requirement): You need to tell the Freezone bosses who the actual main owners of your company are. This helps keep things clear.
• Anti-Money Laundering (AML) Rules: Free Zone companies must have ways to stop illegal money activities and report anything suspicious.
• Yearly Renewal: You must renew your business license every year, along with your office space rent and other permits.

With the introduction of Corporate Tax in the UAE (effective from June 1, 2023), Freezone companies must comply with specific tax rules while still benefiting from favourable rates, often 0%, if certain conditions are met.

1. 0% Tax for Qualifying Freezone Persons

Freezone entities can continue to enjoy a 0% Corporate Tax rate on Qualifying Income if they meet the criteria of a Qualifying Free Zone Person. To qualify, a Freezone company must:

• Maintain adequate economic substance in the UAE (real operations, staff, and physical presence).
• Generate income primarily from Qualifying Activities, such as international trading, intra-Freezone services, or holding company activities.
• Not elect to be subject to the regular 9% Corporate Tax regime.
• Comply with arm’s length pricing and transfer pricing rules for transactions with related parties.
• Ensure that income from Non-Qualifying Activities (e.g., direct sales to the UAE mainland without proper structure) remains within allowed limits.

2. 9% Tax on Non-Qualifying Income

If a Free Zone company fails to meet the above conditions or earns income outside the scope of “Qualifying Activities,” that portion of its profit (exceeding AED 375,000) is subject to the standard 9% Corporate Tax rate.

3. Mandatory Corporate Tax Registration

Regardless of the tax rate applicable, all Free Zone companies must register for Corporate Tax with the Federal Tax Authority (FTA).

4. Annual Tax Returns and Audited Financials

All Freezone companies, even those paying 0%, must file annual Corporate Tax returns. From 2025 onward, they are also required to submit audited financial statements to support their tax filings.

UAE Free Zones support a wide variety of business activities, but each Freezone often specializes in specific sectors. This makes Freezones ideal for companies that do not require a direct presence in the UAE mainland. Here are some of the most popular and well-supported activities:

1. E-commerce Businesses

Freezones like Dubai CommerCity and Sharjah Media City are designed for digital trade, making it easy to launch and scale online stores that sell products globally with minimal restrictions.

2. Consultancy & Professional Services

Business advisory, IT consulting, HR, marketing, education, and legal services can be established easily in Free Zones with flexible licensing options and minimal setup costs.

3. Freelancing & Creative Professions

Freezones such as Fujairah Creative City and RAKEZ offer freelance permits for individual professionals in design, writing, software development, media, and education.

4. Import & Export Trading

Free Zones provide ideal logistics support, including warehousing and customs benefits, for businesses involved in general or specialized trading, as well as import/export operations.

5. Tech Startups & Software Development

Zones like Dubai Internet City and Abu Dhabi’s Hub71 offer startup-friendly ecosystems, innovation labs, and access to venture capital, perfect for tech and SaaS companies.

6. Media & Content Production

Companies in advertising, film production, publishing, or PR benefit from Free Zones such as Dubai Media City, which provide sector-specific infrastructure and licenses.

7. Education & Training Providers

Free Zones allow businesses offering educational consulting, vocational training, e-learning, and workshops to operate with tailored licenses and visa quotas.

8. Healthcare & Wellness Services

Certain Freezones (especially healthcare-focused ones like Dubai Healthcare City) support medical consulting, wellness coaching, nutrition services, and therapy businesses, subject to activity approval.

9. Manufacturing, Assembly & Packaging

Industrial Freezones permit light manufacturing, assembling parts, and product packaging under industrial licenses. These zones offer facilities and storage for production activities.

10. Holding Companies & Investment Firms

Free Zones also cater to holding structures used to manage assets, shares, or intellectual property, particularly where asset protection and tax planning are priorities.

One of the best things about starting a business in a UAE Free Zone is how fast it is! The usual time is generally very quick:

• Total Timeframe: Most Freezone company setups are completed within 3 to 10 working days. In certain cases, particularly for straightforward applications, the process may be expedited, with some Freezones issuing licenses in as little as 60 minutes.
• Time for Key Steps:
  • Getting Activity & Name Approved: 1-2 days
  • Getting First Go-Ahead: 1-2 days
  • Submitting & Checking Papers: 2-3 days
  • Getting Your License: 1-3 days after everything is processed and paid.
• Potential Causes of Registration Delays:
  • Missing Papers: If any of your documents are not ready or are wrong, it will take longer.
  • Type of Business: Some special businesses (like health, education, or finance) might need extra approvals from other government groups, which can add a few days or weeks.
  • How Fast You Respond: How quickly you or your helper replies to questions from the Freezone.
  • Putting in Company Money: If the Freezone needs you to actually put company money into a bank, this can add time, depending on how fast the bank works.
  • Security Checks: Very rarely, extra security checks might be needed, adding a few days.

While the official Freezone company creation is fast, opening a business bank account afterwards can sometimes take longer (2-4 weeks or more), so remember to plan for that.

Getting your license is a big step, but your responsibilities don't end after Free Zone Business Setup in UAE. Here are the main things you need to keep doing:

• Renew Your License Yearly: You must renew your business license every year before it runs out. This means paying renewal fees (typically ranging from AED 10,000 to AED 15,000) and making sure your office space lease is still active.
• File Company Tax Reports: Even if your company pays 0% corporate tax, you must register with the government tax office (FTA) and send in a yearly Corporate Tax report. This is a must-do, usually due within 9 months after your financial year ends.
• File VAT Reports (if you need to): If your business is registered for sales tax (VAT), you must send in VAT reports regularly (usually every three months) and pay any VAT you owe.
• ESR Reports (if you need to): If your company does certain "Relevant Activities" under ESR rules, you must send a yearly note and, if asked, a yearly report to show you have real business activity in the UAE Free Zone.
• Keep Owner Records Updated: You must keep exact and up-to-date records of who the real main owners of your company are and share them with the Freezone if they ask.
• Audited Financial Reports: New for 2025: Starting from the financial year 2024, all Free zone companies across the UAE are required to submit audited financial statements, regardless of their size or activity. These reports must be prepared and verified by an independent, registered audit firm to ensure compliance with UAE Corporate Tax regulations.
• Renew Visas: Visas for owners and employees must be renewed regularly (usually every 2 or 3 years). This includes health checks and getting a new Emirates ID card.
• Keep Your Office Space: You must keep your registered office space active, whether it's a shared desk or a private office.
• Follow Freezone Rules: You must stick to all the specific rules of your chosen Free Zone. These rules can sometimes change.
• Keep Your Bank Account Active: Make sure your company bank account stays active and managed correctly.
• Closing Your Company: If you decide to close your Free Zone company, you must follow a structured process. This includes officially notifying the Free Zone authority, settling all outstanding dues (including employee end-of-service benefits), and closing the company’s corporate bank accounts.

To properly cancel your license and avoid penalties, you must also obtain:

• Clearance certificates (from utilities, telecommunications, etc.)
• Visa cancellations (for all employees, dependents, and partners)
• A liquidation report issued by a licensed auditor (required by many Free Zones)

Keeping up with these things after setting up is super important to keep your Freezone business setup legal and in good shape.

Need help managing your post-setup compliance?

Contact Safe Ledger today, and we’ll ensure your Freezone company stays compliant, up-to-date, and penalty-free.